Tesla Smashes Expectations as Giddy Wall Street Signals $2,000

  • Tesla reached four consecutive quarters of profitability, which means it is now eligible for the S&P 500 index.
  • Wedbush Securities executive Dan Ives says a $2,000 bull case for the carmaker is now likely.
  • China is considered as a constant catalyst for the stock in the upcoming months.

In the second quarter of 2020, Tesla secured a net income of $104 million – marking the first four continuous quarters of profitability in the company’s history. Now, it is eligible for consideration to be placed on the S&P 500 index.

According to Dan Ives, an executive at Wedbush Securities,  Tesla is on track to reach $2,000 per share.

Analysts say a confluence of three factors could catalyze the Tesla stock until the year’s end. They are the firm’s profitability in China, eligibility for the S&P 500 index, and high revenues.

The stock price of Tesla rises 4% from $1,592, hitting $1,657. | Source: Yahoo Finance

S&P 500 Eligibility, Robust Financials, And High Profits Set Tesla Strongly For 2021

In the official Q2 2020 financial results, Tesla said its operating margin neared 5% in the last 12 months.

Over time, Tesla said it expects the firm’s profitability to reach industry-leading levels. The company said:

Our profit improved sequentially due to fundamental operational improvements… For the trailing 12 months, our GAAP operating margin reached nearly 5%. We expect our operating margin will continue to grow over time, ultimately reaching industry-leading levels.

In the near-term, it also sets Tesla to be included in the S&P 500. There are five essential requirements to be included in the index:

  1. U.S. company
  2. A market cap of $5.3 billion or higher
  3. The public owns 50% of shares minimum
  4. Profitability over four recent consecutive quarters
  5. Active market

Tesla now meets all five requirements, with the latest quarterly financial results marking four consecutive profitable quarters.

Ives described the performance of Tesla in recent months as a…

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